Purchaser's power to rescind where house damaged.
Hi July,
Gee you like taxing my memory, don't you?? hehehe
OK, legislatively this is the answer:
FIRSTLY:
Estate Agents (Contracts) Regulations 1997 - SCHEDULE
Form 1 Estate Agents Act 1980 CONTRACT NOTE
[*IN PART*]
Loss or Damage Before Settlement
2.1 The vendor carries the risk of loss or damage to the property and the chattels until settlement.
2.2 The vendor must deliver the property and the chattels to the purchaser at settlement date in their present condition (fair wear and tear excepted).
2.3 If any chattel is not in its present condition (fair wear and tear
excepted) at settlement, the purchaser is only entitled to compensation from the vendor.
This quote is an extract from your contract, it is part of the General Conditions. This will be mentioned in a solicitor drawn contract, but these general conditions are implied in agent-drawn contracts. This condition means that the property has to be in the same condition at settlement as it was at signing.
SECONDLY:
SALE OF LAND ACT 1962 - SECT 34
Power of purchaser to rescind contract where house destroyed
34. Power of purchaser to rescind contract where house destroyed
(1) Where a contract for the sale of land upon which there is a dwelling-house has been entered into, and where the dwelling-house is so destroyed or damaged as to be unfit for occupation as a dwelling-house, before the purchaser becomes entitled to possession or to the receipt of rents and profits he may, at his option, rescind the contract by notice in writing given to the vendor or his legal practitioner within fourteen days after the purchaser becomes aware of the destruction of or damage to the dwelling-house.
(2) Upon rescission of a contract for the sale of land pursuant to this section-
(a) any moneys paid by the purchaser shall be refunded to him;
(b) any documents of title or transfer shall be returned to the vendor; and
(c) the provisions of section 35 shall not apply and the vendor and any other person entitled to benefit from any insurance policy shall be entitled to do so to the same extent as they would have been if the land had not been subject to the contract.
(3) Any provision in any contract for the sale of land or other document whereby any provision of this section is excluded, modified or rescinded shall be void and of no effect.
This means that the purchaser is able to rescind the contract if the house is uninhabitable at settlement.
SO:
(Please note, this post follows on from my "Do I have to have insurance before settlement" post)
What this means is that assuming you have insurance on the property you should start the insurance claim and repair procedure as soon as possible.
I would also have your solicitor contact theirs as soon as possible to advise them of the level of damage and also advise them that the damage is being rectified.
Be aware that the purchaser is within their rights to delay settlement until the property is in "substantially the same condition" as it was when the purchaser signed for the property.
Note also that this clause hangs largely on the definition of "HABITABLE". Although this is not clearly defined, the clause was meant to offer protection against total destruction, however I think that if the property is not in a condition where people could move in and live, I believe that would count. (There is power, under section 20 to call in arbitrators)
Please note the usual disclaimers, I am not a solicitor, this is not legal advice, see your solicitor. yadda yadda...
Hope this helps,
asy
